Koofers

Test 1 - Flashcards

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Class:MKT 301 - PRIN OF MARKETING
Subject:MARKETING
University:Clemson University
Term:Fall 2011
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marketing the activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
marketing concept seeking to satisfy customers needs and wants
fundamental purpose of marketing create value and benefits for consumers and all partners
4 P's price, product, promotion, place
Generated by Koofers.com
Who engages in marketing? For profit companies (defined by customers and function), nonprofit companies, and individuals
Production-oriented era Industrial revolution; product innovation, not the needs of individuals
Sales-oriented era Great Depression; advertising, sales techniques
Market-oriented era after World War II; focus on wants/needs, market dictating products
Generated by Koofers.com
Value-based marketing era Based on what adds value and what consumers value
Personal value equation Value = benefits recieved - (cost + hassle)
company becomes value driven by: sharing information about customers and competitors across organization, balancing customer's benefits and costs, building relationships with customers
transactional orientation regards buyer-seller relationship as merely a series of individual transactions
Generated by Koofers.com
relational orientation based on philosophy that buyers and sellers should develop a long-term relationship
Why is marketing important? - expands firm's global presence
- pervasive across the organization
- pervasive across the supply chain
- makes life easier and provides employment opportunities
- enriches society
- can be entrepreneurial
Marketing strategy identifies a firm's target markets, a related marketing mix (their P's), and the basis upon which the firm plans to build a sustainable competitive advantage
sustainable competitive advantage an advantage over the competition that is not easily copied, and thus can be maintained over a long period of time
Generated by Koofers.com
Competitive Advantage requirements (VIRO) V- something of value
I - difficult to imitate
R - rare in the marketplace
O - organizations can support it
things needed to build competitive advantage - customer excellence (brand reputation, company culture/customer service)
- operational excellence
- product excellence
- locational excellence
- social responsibility
marketing plan an analysis of current market situation, opportunities and threats, marketing objectives and strategy specified in terms of 4 P's, action programs, and projected/pro-forma income statement
function of marketing plan allocate resources
Generated by Koofers.com
goal of marketing plan to accomplish objectives, deliver value, and be competitive
who manages marketing on corporate level? top executives
who manages marketing on business level? strategic business units
who manages business on functional level? department
Generated by Koofers.com
Phase 1 Planning Phase
Step 1 - define business mission
Step 2 - situation analysis (SWOT)
Step 1 define business mission (mission statement)
mission statement broad description of firm's objectives and the scope of activities it plans to undertake; attempts to answer what type of business it is and what is needed to accomplish the goals and objectives of the business
Step 2 Situation analysis (SWOT)
Generated by Koofers.com
SWOT Strengths - positive internal attributes
Weaknesses - negative internal attributes
Opportunities - positive external aspects
Threats - negative external aspects
Phase 2 Implementation phase
Step 3: Identify opportunities
Step 4: Implement marketing mix
Step 3 identify opportunities (STP)
Segmentation
Targeting
Positioning

Step 4 Implement marketing mix
Product, price, place, promotion
Generated by Koofers.com
cost-based pricing when a firm determines the costs of producing or providing its product and then adds a fixed amount above that total to arrive at the selling price
competitor-based pricing when a firm prices below, at, or above competitors' offerings
value-based pricing priced according to the customer's point of view of the value
value proposition key benefits/value for target customers
Generated by Koofers.com
Phase 3 Control phase
Step 5: Evaluate performance
Step 5 Evaluate performance
Market metrics or portfolio analysis
Portfolio analysis evaluates the firm's various products and businesses and allocates resources according to which products are expected to be the most profitable in the future
Boston Consulting Group portfolio analysis method classifies all products or services in two-by-two matrix
Generated by Koofers.com
relative market share product's market share compared to that of the largest firm in the industry
market growth rate annual rate of growth of the specific market in which the product competes; how attractive a particular market is
stars high growth markets, high market share
cash cows low growth markets, high market share
Generated by Koofers.com
question marks high growth markets, low market shares
dogs low growth markets, low market shares
market penetration focuses firm's efforts on existing customers; attracting new consumers to the firm's current market or encouraging current customers to buy more (promotions, etc)
market development using the existing market offering to reach new market segments
Generated by Koofers.com
product development offers a new product or service to the firm's current target market
diversification introduces a new product or service to a market segment that is not currently served; related or unrelated
downsizing eliminating products, abandoning markets
centerpiece of marketing framework consumers
Generated by Koofers.com
immediate environment factors the company's capabilities, competitors and competitive intelligence, and the company's corporate partners
macroenvironmental factors culture, demographics, social issues, technological advances, economic situation, and political/regulatory environment
culture shared meanings, beliefs, morals, values, and customers of a grup of people
demographics age, income, gender, education, ethnicity
Generated by Koofers.com
generational cohorts seniors, baby boomers, generation x, generation y, tweens
social issues/trends societal issues, values, and concerns that help shape culture (green movement, marketing to children, privacy concerns)
technological advances new products, new forms of communication, new retail channels; improves value of products and services
economic situation inflation, unemployment, interest rates
Generated by Koofers.com
political/regulatory environment components and implications components - political parties, government organizations, legislation, and laws
implications - dictates legal competitive practices, consumer protection, and industry-specific regulation
1890 Sherman Act prohibits monopolies and other activities that would restrain trade or competition; makes fair trade within a free market a national goal
1914 Clayton Act supports Sherman Act by prohibiting combination of two or more competing corporations through pooling ownership of stock and restricting pricing policies such as price discrimination, exclusive dealing, and tying clauses to different buyers
1914 Federal Trade Commission regulates unfair competitive practices and practices that deceive or are unfair to consumers
Generated by Koofers.com
Consumer Decision Process steps that consumers go through before, during, and after making purchases
Consumer Decision Process Step 1 Need Recognition
- recognize unsatisfied need (internal or external stimuli)
functional needs can do simple task
psycholoical needs how we feel using a product; personal gratification
Generated by Koofers.com
Consumer Decision Process Step 2 Information search (internal or external)
Factors affecting consumers' information search processes perceived benefits vs. cost of search, locus of control, actual or perceived risk (performance, financial, psychological), type of product (specialty, shopping, convenient)
Consumer Decision Process Step 3 Evaluation of Alternatives

Attribute Sets Universal sets, retrieval sets, evoked sets, inert sets, inept sets
Generated by Koofers.com
evaluative criteria determinant attributes, decision heuristics (mental shortcuts)
Consumer Decision Process Step 4 Purchase decision and consumption
- Value is number 1 factor
Consumer Decision Process Step 5 Postpurchase behavior
- Customer Satisfaction (customer expectations vs perceived performance)
- Postpurchase dissonance
- Customer loyalty (or disloyalty)
Factors influencing the consumer decision process elements of the marketing mix, psychological factors, social factors, situational factors
Generated by Koofers.com
psychological factors influencing consumer decision process motives, attitudes, perceptions, learning, lifestyle
Maslow's Hierarchy of Needs physiological needs, safety needs, love needs, esteem needs, self-actualization
attitude types influencing consumer decision process cognitive - what we believe to be true
affective - what we feel about the issue
behavioral - actions we undertake
perception types influencing consumer decision process selective attention, selective distortion, selection retention
Generated by Koofers.com
social facotrs influencing consumer decision process family, reference groups, culture
situational factors affecting consumer decision process purchase situation, shopping situation, temporal state
extended problem solving considerable time and effort analyzing alternatives
limited problem solving little effort and time researching; prior experience with the product or service
Generated by Koofers.com
habitual decision making consumers engage in little conscious effort
impulse buying decision made on the spot when someone sees the merchandise
Generated by Koofers.com

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 marketingthe activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
 marketing conceptseeking to satisfy customers needs and wants
 fundamental purpose of marketingcreate value and benefits for consumers and all partners
 4 P'sprice, product, promotion, place
 Who engages in marketing?For profit companies (defined by customers and function), nonprofit companies, and individuals
 Production-oriented eraIndustrial revolution; product innovation, not the needs of individuals
 Sales-oriented eraGreat Depression; advertising, sales techniques
 Market-oriented eraafter World War II; focus on wants/needs, market dictating products
 Value-based marketing eraBased on what adds value and what consumers value
 Personal value equationValue = benefits recieved - (cost + hassle)
 company becomes value driven by:sharing information about customers and competitors across organization, balancing customer's benefits and costs, building relationships with customers
 transactional orientationregards buyer-seller relationship as merely a series of individual transactions
 relational orientationbased on philosophy that buyers and sellers should develop a long-term relationship
 Why is marketing important?- expands firm's global presence
- pervasive across the organization
- pervasive across the supply chain
- makes life easier and provides employment opportunities
- enriches society
- can be entrepreneurial
 Marketing strategyidentifies a firm's target markets, a related marketing mix (their P's), and the basis upon which the firm plans to build a sustainable competitive advantage
 sustainable competitive advantagean advantage over the competition that is not easily copied, and thus can be maintained over a long period of time
 Competitive Advantage requirements (VIRO)V- something of value
I - difficult to imitate
R - rare in the marketplace
O - organizations can support it
 things needed to build competitive advantage- customer excellence (brand reputation, company culture/customer service)
- operational excellence
- product excellence
- locational excellence
- social responsibility
 marketing planan analysis of current market situation, opportunities and threats, marketing objectives and strategy specified in terms of 4 P's, action programs, and projected/pro-forma income statement
 function of marketing planallocate resources
 goal of marketing planto accomplish objectives, deliver value, and be competitive
 who manages marketing on corporate level?top executives
 who manages marketing on business level?strategic business units
 who manages business on functional level?department
 Phase 1Planning Phase
Step 1 - define business mission
Step 2 - situation analysis (SWOT)
 Step 1define business mission (mission statement)
 mission statementbroad description of firm's objectives and the scope of activities it plans to undertake; attempts to answer what type of business it is and what is needed to accomplish the goals and objectives of the business
 Step 2Situation analysis (SWOT)
 SWOTStrengths - positive internal attributes
Weaknesses - negative internal attributes
Opportunities - positive external aspects
Threats - negative external aspects
 Phase 2Implementation phase
Step 3: Identify opportunities
Step 4: Implement marketing mix
 Step 3identify opportunities (STP)
Segmentation
Targeting
Positioning

 Step 4Implement marketing mix
Product, price, place, promotion
 cost-based pricingwhen a firm determines the costs of producing or providing its product and then adds a fixed amount above that total to arrive at the selling price
 competitor-based pricingwhen a firm prices below, at, or above competitors' offerings
 value-based pricingpriced according to the customer's point of view of the value
 value propositionkey benefits/value for target customers
 Phase 3Control phase
Step 5: Evaluate performance
 Step 5Evaluate performance
Market metrics or portfolio analysis
 Portfolio analysisevaluates the firm's various products and businesses and allocates resources according to which products are expected to be the most profitable in the future
 Boston Consulting Group portfolio analysis methodclassifies all products or services in two-by-two matrix
 relative market shareproduct's market share compared to that of the largest firm in the industry
 market growth rateannual rate of growth of the specific market in which the product competes; how attractive a particular market is
 starshigh growth markets, high market share
 cash cowslow growth markets, high market share
 question markshigh growth markets, low market shares
 dogslow growth markets, low market shares
 market penetrationfocuses firm's efforts on existing customers; attracting new consumers to the firm's current market or encouraging current customers to buy more (promotions, etc)
 market developmentusing the existing market offering to reach new market segments
 product developmentoffers a new product or service to the firm's current target market
 diversificationintroduces a new product or service to a market segment that is not currently served; related or unrelated
 downsizingeliminating products, abandoning markets
 centerpiece of marketing frameworkconsumers
 immediate environment factorsthe company's capabilities, competitors and competitive intelligence, and the company's corporate partners
 macroenvironmental factorsculture, demographics, social issues, technological advances, economic situation, and political/regulatory environment
 cultureshared meanings, beliefs, morals, values, and customers of a grup of people
 demographicsage, income, gender, education, ethnicity
 generational cohortsseniors, baby boomers, generation x, generation y, tweens
 social issues/trendssocietal issues, values, and concerns that help shape culture (green movement, marketing to children, privacy concerns)
 technological advancesnew products, new forms of communication, new retail channels; improves value of products and services
 economic situationinflation, unemployment, interest rates
 political/regulatory environment components and implicationscomponents - political parties, government organizations, legislation, and laws
implications - dictates legal competitive practices, consumer protection, and industry-specific regulation
 1890 Sherman Actprohibits monopolies and other activities that would restrain trade or competition; makes fair trade within a free market a national goal
 1914 Clayton Actsupports Sherman Act by prohibiting combination of two or more competing corporations through pooling ownership of stock and restricting pricing policies such as price discrimination, exclusive dealing, and tying clauses to different buyers
 1914 Federal Trade Commissionregulates unfair competitive practices and practices that deceive or are unfair to consumers
 Consumer Decision Processsteps that consumers go through before, during, and after making purchases
 Consumer Decision Process Step 1Need Recognition
- recognize unsatisfied need (internal or external stimuli)
 functional needscan do simple task
 psycholoical needshow we feel using a product; personal gratification
 Consumer Decision Process Step 2Information search (internal or external)
 Factors affecting consumers' information search processesperceived benefits vs. cost of search, locus of control, actual or perceived risk (performance, financial, psychological), type of product (specialty, shopping, convenient)
 Consumer Decision Process Step 3Evaluation of Alternatives

 Attribute SetsUniversal sets, retrieval sets, evoked sets, inert sets, inept sets
 evaluative criteriadeterminant attributes, decision heuristics (mental shortcuts)
 Consumer Decision Process Step 4Purchase decision and consumption
- Value is number 1 factor
 Consumer Decision Process Step 5Postpurchase behavior
- Customer Satisfaction (customer expectations vs perceived performance)
- Postpurchase dissonance
- Customer loyalty (or disloyalty)
 Factors influencing the consumer decision processelements of the marketing mix, psychological factors, social factors, situational factors
 psychological factors influencing consumer decision processmotives, attitudes, perceptions, learning, lifestyle
 Maslow's Hierarchy of Needsphysiological needs, safety needs, love needs, esteem needs, self-actualization
 attitude types influencing consumer decision processcognitive - what we believe to be true
affective - what we feel about the issue
behavioral - actions we undertake
 perception types influencing consumer decision processselective attention, selective distortion, selection retention
 social facotrs influencing consumer decision processfamily, reference groups, culture
 situational factors affecting consumer decision processpurchase situation, shopping situation, temporal state
 extended problem solvingconsiderable time and effort analyzing alternatives
 limited problem solvinglittle effort and time researching; prior experience with the product or service
 habitual decision makingconsumers engage in little conscious effort
 impulse buyingdecision made on the spot when someone sees the merchandise
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